Title
Finance Committee Meeting Highlights of June 16, 2015
Body
CITY OF SAN LEANDRO
FINANCE COMMITTEE
June 16, 2015
San Leandro City Hall
835 East 14th Street
San Leandro, California
(Sister Cities Gallery)
1. CALL TO ORDER
Meeting was called to order at 5:00 p.m.
1.A. Attendance
Committee Members: Pauline Russo Cutter, Mayor; Jim Prola, Vice Mayor; Benny Lee, Council Member
City Staff: Chris Zapata, City Manager; David Baum, Finance Director; Will Fuentes, Assistant Finance Director; Mary Ann Perini, Budget & Compliance Manager
1.B. Announcements
2. DISCUSSION ITEMS
2.A. Discussion Regarding Retirement Liabilities and Policy
Unfunded Retirement Liabilities
With $157 million in Unfunded Liabilities and growing, staff is seeking to achieve council's goal to place the City on a firm foundation to reach long term financial stability.
Over the past 23 years, data leading up to the current status of the City's pension funds at CalPERS shows how pension contribution rates dramatically decreased and then increased for both Public Safety and Miscellaneous employees in years 1995 - 1999 with a period of declining investment returns during years 1998 - 2002 and began to rise again substantially with an average rate of return of 7.4% which is just under the assumed 7.5% - 7.75% for the past 10 years.
California State's pension reform law, which took effect on January 1, 2013, will likely mitigate PERS liability growth rates. The new law lengthens the retirement age to 62 for Miscellaneous Employees with an employee contribution rate of 6.75% and age 57 for Public Safety Employees with an employee contribution rate of 12.25%.
New Pension Challenge and Restructuring Options
San Leandro teamed up with Union City and Newark to request some relief from CalPERS in order to minimize a $1.15 million surcharge to Public Safety pension Unfunded Liabilities. With testimony provided by Finance Director David Baum on May 1...
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